Risks

A denial-of-service vulnerability that affects all versions of
bitcoind and Bitcoin-Qt has been reported and fixed. An attacker
could isolate a victim's node and cause the creation of blockchain
forks.

Solutions

Because this bug could be exploited to severely disrupt the Bitcoin
network we consider this a critical vulnerability, and encourage
everybody to upgrade to the latest version: 0.6.2.

Technical Details

Full technical details are being withheld to give people the
opportunity to upgrade.

Thanks to Forrest Voight for discovering and reporting the vulnerability.

Questions & Answers

How would I know if I am the victim of this attack?

Your bitcoin process would stop processing blocks and would have a
different block count from the rest of the network (you can see the
current block count at websites like blockexplorer.com or
blockchain.info). Eventually it would display the message:

WARNING: Displayed transactions may not be correct! You may need to
upgrade, or other nodes may need to upgrade.

(note that this message is displayed whenever your bitcoin process
detects that the rest of the network seems to have a different
block count, which can happen for several reasons unrelated to
this vulnerability).